Calcineurin is a Ca2+/calmodulin activated phosphatase that couples Ca 2+ pulses to gene transcription. Importantly, it is the target for two of the most widely used immunosuppressants, cyclosporin A and FK506, both of which inhibit bone formation and cause skeletal loss. We now find that deletion of the alpha isoform of calcineurin A impairs, by -50%, the ability of hematopoetic stem cell precursors to form osteoclasts in response to RANK-L, a key osteoclastogenic cytokine. This effect is mimicked by both cyclosporin A and FK506, suggesting that calcineurin is downstream of RANK-L. We also find that RANK-L stimulates the expression and nuclear import of calcineurin's primary substrate, NFATc1. Likewise, Ca2+ triggers NFATc1 import, stimulates osteoclast formation, and inhibits the transcription of an anti-osteoclastogenic gene, CD38. Dominant-negative NFAT attenuates, while constitutively active NFAT enhances osteoclast precursor differentiation. However, apart from NFATc1, calcineurin also binds to and dephosphorylates the transcription inhibitor, lkB, likely as a means to prevent unrestricted osteoclastogenesis. Thus, our central hypothesis is that calcineurin and NFATc1 are both required for the osteoclastogenesis induced by RANKL and Ca2+ that is in turn regulated by the concomitant dephosphorylation of IkB. Specific Aim 1 will determine whether calcineurin is necessary for RANK-L-induced osteoclast formation through gain- and loss-of-function experiments involving (a) transduction of constitutively active and dominant negative calcineurin mutants as TAT fusion proteins, (b) stably transfecting osteoclast precursors with isoform-specific calcineurin snRNAs, and (c) rescuing the defective osteoclastogenesis in Aa-/- stem cells. Specific Aim 2 will examine the relative contributions of NFATc1 and IkBa in modulating RANK-L-induced osteoclastogenesis. Specific Aim 3 will investigate whether the effects of Ca2+ on osteoclast formation and target gene expression require calcineurin and NFATc1. For both the latter aims, we will combine cross-linking, co-immunoprecipitation, dephosphorylation, and nuclear translocation assays with constitutively active and dominant-negative NFAT transduction in vitro. In Specific Aim 2, the two mutants will also be over-expressed in osteoclasts in transgenic mice and effects on the skeleton examined by bone densitometry, micro-computerized tomography, histomorphometry, and remodeling marker measurements. [unreadable] [unreadable]